In 1986, the company settled a case that called into question the medical claims of some of their products and their pyramid scheme-style business model.[1]Nobel Prize-winning scientist Louis J. Ignarro was noted for creating their Niteworks® product (a mix of vitamin C, vitamin E, folic acid, lemon balm extract, α-lipoic acid, L-taurine, and L-arginine and L-citrulline), which claimed to be able to increase the functioning efficiency of all the body's major organs. Ignarro's promotion of the product caused a flap when his undisclosed ties to Herbalife were revealed after he co-authored a paper hawking the product in the Proceedings of the National Academies of Science in 2004.[2][3]

In February 2016 Herbalife agree to pay a $200 million and change its business practices as a result of a legal settlement with the Federal Trade Commission.[4] The settlement required that Herbalife track retail sales in the US (which it had not done) and require that at least two-thirds of the rewards be based on retail sales.[4] The settlement did not resolve the accusation by billionaire investor William Ackman that Herbalife has operated as an illegal pyramid scheme.[4]